ACN
ACNAccenture is a global professional services company providing consulting and outsourcing solutions in the business services industry.
It is a Fortune 500 leader renowned for its vast expertise in digital, cloud, and security transformation, serving a majority of the Global Fortune 500.
Updated: January 14, 2026, 16:00 EST
Investment Opinion: Should I buy ACN Today?
Analysis of Accenture (ACN)
Technical Perspective ACN shows promising recovery signs, gaining nearly 10% over three months with notable outperformance against the broader market. Despite trading significantly below its 52-week high, the stock appears oversold after a steep correction, suggesting potential for further rebound if positive momentum continues. However, its high beta indicates susceptibility to market volatility.
Fundamental Strength Accenture demonstrates solid revenue growth and improved profitability, driven by efficient cost management and strong service delivery. The company maintains excellent financial health with low debt, high interest coverage, and robust cash flows. Operational metrics like a healthy cash conversion cycle reflect effective working capital management and stable performance.
Valuation & Risk Considerations While traditional metrics like P/B and EV/EBITDA suggest slight overvaluation, the very low PEG ratio points to significant undervaluation relative to earnings growth potential. Key risks include higher volatility due to the stock's elevated beta and substantial historical drawdowns, though negligible short interest and strong liquidity mitigate some concerns.
Investment Recommendation Accenture presents a compelling case for investment, combining strong fundamentals, reasonable valuation growth prospects, and technical rebound potential. Despite market volatility risks, its financial stability and efficient operations provide a solid foundation for recovery. Investors may consider accumulating positions on weakness, targeting a return toward its previous highs over the medium term.
*This analysis is for informational purposes only and not investment advice.*
ACN 12-Month Price Forecast
RockFlow Model Forecast: Three Scenarios for 2026
Of course. Here is a 12-month outlook for Accenture (ACN) based on the provided analysis.
12-Month Outlook for Accenture (ACN)
Catalysts: The primary catalyst for ACN is a continued rebound from its oversold condition, fueled by its solid revenue growth, high profitability, and operational efficiency. A sustained focus on high-demand areas like digital transformation and AI consulting should continue to drive fundamental performance.
Risks: The key risk is elevated volatility, as indicated by the stock's high beta, making it susceptible to broader market downturns. Additionally, the stock must prove it can sustainably recover from its significant correction and break back toward its previous highs.
Outlook: Despite near-term volatility risks, Accenture's strong financial health and compelling growth valuation (low PEG ratio) support a positive 12-month view. While an analyst target is not specified here, the analysis suggests a path for recovery, with the potential for the stock to appreciate as it closes the gap toward its 52-week high.
Wall Street Consensus
Most Wall Street analysts are optimistic about ACN's 12-month outlook, with consensus target around $288.54, indicating expected upside potential.
Bulls vs Bears: ACN Investment Factors
Overall, ACN has investment potential but also faces challenges. Here are key factors to weigh before investing.
Bullish
- Attractive valuation: Stock trades 37% below its peak, presenting potential value.
- Strong earnings performance: Q1 2026 results exceeded market expectations.
- Strategic expansion: Recent strategic announcement caused a 3.4% stock jump.
- High-growth stock ranking: Zacks Style Scores identify ACN as a top growth stock.
- Solid fundamentals: Company is experiencing growth and trades at lower valuation.
Bearish
- Increased investor concerns: Investor letters highlight rising concerns about the company.
- AI impact uncertainty: Worries about AI's long-term effect on business model.
- Stock price volatility: Stock slipped despite beating earnings expectations.
- Market skepticism: Stock decline reflects lingering investor doubts.
- Sector headwinds: Business services sector facing challenges from technological disruption.
ACN Technical Analysis
Accenture has demonstrated strong relative performance lately despite remaining well below its 52-week highs. The stock is currently positioned in a potentially oversold state after a significant correction from its peak.
Over the short term, ACN has shown positive momentum, posting a 2.38% gain over one month and a more substantial 9.82% gain over three months. More notably, it has outperformed the broader market by 6.45% over the three-month period, indicating strong relative strength even with its elevated beta suggesting higher volatility.
The current price of $276.8 places the stock approximately 30.5% above its 52-week low but a significant 30.5% below its 52-week high of $398.35. Given the steep maximum drawdown of -41.6% over the past year, the stock appears to be in an oversold condition, residing in the lower portion of its annual trading range.
| Period | ACN Return | S&P 500 |
|---|---|---|
| 1m | +6.2% | +1.3% |
| 3m | +19.8% | +5.7% |
| 6m | -3.0% | +10.6% |
| 1y | -17.5% | +16.5% |
| ytd | +11.0% | +1.1% |
ACN Fundamental Analysis
Revenue & Profitability ACN demonstrated solid revenue growth with Q1 FY2026 revenue reaching $18.7 billion, up from $17.6 billion in the previous quarter. Profitability improved notably, with net profit margin expanding to 11.8% from 8.0%, driven by better operational efficiency and a higher gross margin of 32.9%. This reflects effective cost management and enhanced service delivery.
Financial Health The company maintains a strong balance sheet with a low debt ratio of 12.7% and a conservative debt-to-equity ratio of 26.6%. Robust interest coverage of 48.2x indicates ample earnings to service debt, while healthy cash reserves support liquidity. The cash ratio of 0.48, though moderate, is supplemented by strong operating cash flows.
Operational Efficiency ACN exhibits solid operational metrics with an ROE of 7.2% and an asset turnover of 0.29. The cash conversion cycle of 55.6 days highlights efficient working capital management, despite a high days sales outstanding of 76.9 days. These figures indicate effective asset utilization and stable operational performance.
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Based on the provided ratios, ACN appears reasonably valued to slightly overvalued on traditional metrics. While the forward P/E ratio of 18.0 is reasonable, the trailing P/E ratio of 22.7, a high PB ratio of 5.42, and an elevated EV/EBITDA of 46.3 suggest the market is pricing in strong future earnings and asset efficiency. However, the very low PEG ratio of 0.31 indicates that the stock could be significantly undervalued relative to its expected earnings growth rate.
A peer comparison cannot be conclusively performed as industry average data is unavailable. Valuation metrics are most meaningful when benchmarked against direct competitors to assess relative attractiveness. For a comprehensive analysis, comparing these figures to averages for firms within the IT consulting and services industry would be necessary.
Investment Risk Disclosure
Volatility Risk Analysis: ACN exhibits elevated volatility risk, with a beta of 1.249 indicating it moves approximately 25% more than the broader market. This is compounded by a significant one-year maximum drawdown of -41.6%, highlighting substantial downside risk during market stress. These factors suggest the stock is subject to pronounced price swings relative to its benchmark.
Other Risk Analysis: Notably, ACN carries virtually no short interest, implying little speculative pressure from bearish investors. However, the stock's liquidity profile should be monitored, as fluctuations in trading volume could impact price stability during volatile periods. The primary risks likely stem from broader market conditions and company-specific operational performance.
FAQs
Bullish. The stock appears oversold trading 30% below its 52-week high, while recent quarterly results show strong revenue growth, margin expansion, and a very attractive PEG ratio of 0.31 suggesting undervaluation relative to growth. Despite AI-related sector concerns, this is best suited for long-term investors who can tolerate above-market volatility for a quality company at a discounted price.
Based on the valuation metrics provided, ACN stock appears reasonably valued to potentially undervalued, primarily due to its low PEG ratio indicating strong growth potential relative to its price.
Key Valuation Metrics: * P/E Ratio: 22.72 (Forward P/E: ~18.0) * P/B Ratio: 5.42 * PEG Ratio: 0.31
The core reason for this assessment is the PEG ratio of 0.31, which is significantly below 1.0. A PEG ratio this low suggests the stock's price is not keeping pace with its expected earnings growth, a classic sign of potential undervaluation. While the trailing P/E of 22.7 and the high P/B ratio of 5.42 might suggest a premium valuation, they are likely justified by the company's strong fundamentals—including solid revenue growth, improving profit margins (11.8%), and high operational efficiency (ROE of 7.2%). The forward P/E of ~18.0 also points to expectations of future earnings growth. Without specific industry averages for a direct peer comparison, the compelling PEG ratio is the most critical indicator of value.
Based on the provided information, here are the key risks of holding Accenture (ACN) stock, ordered by importance:
1. Market Volatility Risk: The stock's high beta of 1.249 exposes it to amplified price swings, making it significantly more volatile than the broader market, which was evidenced by a severe -41.6% maximum drawdown over the past year. 2. Industry Cyclicality & Demand Risk: As a consulting and IT services firm, Accenture's revenue is susceptible to downturns in corporate spending, where clients may reduce discretionary projects during an economic slowdown. 3. Operational Execution Risk: Despite current strong profitability, maintaining high net margins and managing the lengthy cash collection cycle (76.9 days sales outstanding) depend on flawless execution of large, complex client contracts across a global operation.
Of course. Here is a professional forecast for Accenture (ACN) stock performance through 2026.
ACN Stock Forecast through 2026
1. Target Price Range: * Base Case (2026): $330 - $370. This assumes steady execution on current strategy, mid-single-digit revenue growth, and maintenance of current profit margins, with a gradual re-rating of the stock as macroeconomic conditions stabilize. * Bull Case (2026): $380 - $420. This scenario is contingent on accelerated adoption of Generative AI and large-scale digital transformation projects, allowing ACN to exceed growth expectations and expand its operating margins.
2. Key Growth Drivers: * Generative AI Adoption: As a leading systems integrator, Accenture is poised to be a primary beneficiary of enterprise investments in implementing and scaling Generative AI solutions across business functions. * Digital & Cloud Transformation: The long-term, structural shift toward cloud-based infrastructure and digitally-enabled operations remains a core, durable growth driver for its consulting and outsourcing services. * Cost Optimization Demand: In an uncertain economic climate, clients increasingly seek ACN's services to streamline operations and reduce costs, creating a counter-cyclical demand stream.
3. Main Assumptions: * Global IT spending continues to grow, with no severe recession. * Accenture maintains its competitive edge in talent acquisition and retention. * The company continues its strategic acquisitions to bolster capabilities in high-growth areas.
4. Uncertainty & Risks: This forecast is highly sensitive to the macroeconomic environment. A significant downturn could delay large client projects, impacting revenue growth. Furthermore, increased competition for AI talent could pressure margins. The stock's valuation is also subject to broader market sentiment and interest rate fluctuations.
In summary, while near-term volatility is expected, Accenture's strong market position, healthy balance sheet, and exposure to key secular technology trends provide a solid foundation for growth through 2026, with the bull case hinging on exceptional execution in the GenAI space.